KUALA LUMPUR (April 11): Hartanah Kenyalang Bhd, a Sarawak-based construction services firm, signed an agreement for TA Securities to underwrite its initial public offering (IPO) on the ACE Market.
Listing is targeted by June this year, Hartanah Kenyalang said in a statement. Under the agreement, TA Securities will underwrite 31.0 million new shares to be made available for application by the Malaysian public and 18.6 million new shares for eligible persons.
“The signing of the underwriting agreement with TA Securities not only reinforces their confidence in us but also takes us a step closer to our IPO,” said Hartanah Kenyalang’s managing director Seah Boon Tiat.
The IPO comes at a time of turbulent markets buffeted by escalating trade tensions between the US and China. Nearly all of the companies listed since March have seen their share prices fall on their debut to below their IPO prices.
Hartanah Kenyalang mainly provides building construction services focusing on institutional buildings such as schools, and other non-residential buildings as well as infrastructure construction services, especially bridges and roads.
Funds raised from the IPO will be used to purchase six new excavators to replace some of its older assets and increase its capacity to take on more jobs. Hartanah Kenyalang also plans to use some of the proceeds for computer hardware and software to expand into design services.
“This comes at an opportune time as we are ready to take advantage of the vast opportunities in the construction industry in Sarawak,” said Seah.
Proceeds from the sale of new shares will also be used to meet the growing project working capital, mainly to pay sub-contractors and suppliers. The company has also set aside some of the funds to repay some of its bank borrowings. The rest will be used to defray listing expenses.
The IPO also involves the sale of existing shares, and proceeds will accrue to co-founders Seah and his elder brother Boon Kee, who is also the deputy managing director, as well as to chief operating officer Tony Cheok, strategic investor Peter Chai, and minority shareholder Yeo Kwang Min.
The Seah brothers are trained as civil engineers.
TA Securities is the IPO’s principal adviser, sponsor, sole placement agent and sole underwriter.